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Why do most small business start ups fail at the early stage ?

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13 answers

The first and foremost challenge for most startups is CONSISTENCY in doing what needs to be done to keep the business running.

It is sometimes easier to start a business than to sustain it.

Most people easily run out of ideas or get discouraged because they are not getting their desired result immediately.

Report Gabriel's answer

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fisrt of all, is your money enough? If your money is running out, I'm afraid, your startups can't last. No matter your consistency. One day, the little you're still managing would be exhausted. So, I'd say, get a 1 or 2 sources for money. Very important, to fund the startup as you run it.

second of all is, is your startup in the right market? This is a thing most don't really look into but just jump into doing startup.

Make sure you're not in the wrong market. You can message me so I'd analyse some things to you on this topic.

Another thing you need to consider is RESEARCH. a lack of research can make your startup crash even in the long run. So. If you have a startup now and it's booming, don't be surprised that if you stop on you research, your business/startup will eventually crash.

Note this. Who are your partners? If you're working on your startup alone, not partnering with any other business owner, it's bad, and if you partner with the bad partners, it's worst. So. You've to check and balance that.

Moreover, you need an effective marketing. Inbox me as well for more info about this.

A little bit really complicated issue you might be facing as a CEO or a person who own/found a startup is not being an expert in the industry. Funnily enough, I am a victim of this some months ago, but, you know what, I fought my way through, I had to take some courses to upskill myself and bring myself up to the standard of my competitors.

Report Oluwamayowa Israel's answer

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Poor Planning and Consistency.Moreso most start don't have a proper business Strategies scaleable.

To crown it up,you need a mentor in a field you want to endovor

Report Ikande's answer

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Because they think if they build it people will come, but that's not true. A startup has to be focused on marketing and selling!!! Streams of revenue must be developed to sustain the business and drive growth.

Report Rick's answer

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Hello, I want to give another perspective from my experience guiding student startups at several universities in Indonesia. Based on this, I often find that the main problem in the early stages is that the idea/product doesn't match the user's problem/need.

I often find, that startup founders only make products with their egos without knowing the user's needs, so the product is not in accordance with the product-market fit or problem-solution fit. The next problem is that startups can't earn revenue because there are no users who want to buy/pay for the product.

Report Fahrein's answer

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Thanks for all the great answers. To sum it up: Here are my thoughts. A) lack of capital or funding B) retaining an inadequate management team, C) a wrong business model D) wrong markets E) Poor cash flow management. F) Bad planning and a lack of strategy. G) Weak leadership. H) Overdependence on a few big customers. I) Lack of research. J) Lack of business plan. K) Mismanagement of cash L) Poor marketing. M) Failing to adapt to quick growth

Report Solomon Donkor Kwame's answer

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Over the last 11 years at MicroMentor and several more years at the SCORE Foundation I have observed a principal reason for startup failure, not mentioned by many of the others who have commented here.

There seems to be a belief that automation, the Internet and social networking can make the business succeed when in fact the real design of the enterprise itself may be lacking (niche, market base, business plan, competitive analysis and financial forecasting)

I hear from many clients who ask, "What Now?" having launched an enterprise that is going nowhere because they are driving the tools and not the car.

I take them back to the garage; design the auto to see if it can run and then apply the wrenches retroactively if that is possible. It is usually a traumatic experience and could have been avoided with strategic and business planning before launch.

Below is a simple test to develop a potential idea for a business.

  1. Do you have a product or service niche in mind?

  2. Do you believe you have a market for 1 above and the means to reach it?

  3. Are you willing to develop a business plan using the tool kit linked below to validate 1 and 2 above before you launch?

If the answer to the above questions is "Yes", use the FREE planning aids linked below to design your business vehicle and the road map you intend to follow on your journey

When you have completed the above definition and planning process you will then be in a position to astutely select the technology tools you wish to use along the way and apply them successfully.

You will be able to network your vehicle, pick up riders as industry partners, and attract revenue fuel in the form of customers by marketing and social networking based on the thorough definition and content of your business plan.

In short, don’t let poor judgments on technology detract from your idea as well as raid your treasury before you launch.

Define your business vehicle and its journey first. Then pick the right technology tools to make a successful trip.

https://www.smalltofeds.com/2015/05/are-you-driving-tools-not-car-in.html

Report Kenneth's answer

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A starup fails where there was insuficient research on consumer of the product, atleast they should expect where they will come from, market coverage not well identified, missio of the startup not well defined or not strategized

Report George's answer

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Reasons for startup failure. Lack of research that leads in failure to identify the right customers and how their taste and preferences vary. Lack of management skills resulting in inefficient coupled with poor decision making. Also poor planning results in business failure. Insufficient resources. Poor pricing strategies is also another cause. Stiff competition affects infant businesses.

Report Nyasha's answer

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According to top CEOs and my own experience, there are 3 major causes: 1.) Cash flow problems, 2.) poor marketing leads to high CAC (Customer Acquisition Costs), which causes your advertising to eat your profits, and finally, 3.) Lack of research. Many companies have succeeded without a formal business plan, but if you haven't verified that there's demand for your business, if you aren't clear about who your audience is, and you don't know how to reach them, then you'll work more, earn less, and burn out.

Report Samantha's answer

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